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(Australian Associated Press)
Australia’s peak business group is calling on the federal government to make the instant asset write-off permanent for small businesses.
The instant asset write-off for small businesses will be extended to June 30, 2020 and lifted to cover purchases of up to $25,000, Prime Minister Scott Morrison announced on Tuesday.
“Although an extension to 2020 is not a commitment for the measure to be permanent, it is a good start,” the Australian Chamber of Commerce and Industry CEO James Pearson said.
“Making the instant asset write-off permanent will encourage longer-term investment planning by small businesses and will support continuous and sustainable business growth.”
Last March, Labor announced it would make the tax break permanent if elected.
This is the third year-long extension to the measure, which was set to finish at the end of the current financial year.
It allows firms with a turnover of up to $10 million a year to instantly claim tax deductions on all equipment purchases worth less than $25,000.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell says it’s good news for small businesses who need to purchase assets, such as a vehicle, printer or generator.
“The small business sector represents 99 per cent of all businesses in Australia, so this measure will give small businesses more opportunities to grow and thrive,” she said.
Ms Carnell says it’s important for small and family businesses to remember that it’s a tax deduction, not a rebate, so sufficient profits are needed to write-off the new asset against.
The change needs legislation, which the government intends to pass once parliament returns in February.